What is an insurance carrier?
Fact-checked with HomeInsurance.com
If you’re shopping around for insurance, terminology is important to understand. In this article, we’re going to break down one of the most basic terms in the insurance world—”insurance carrier.” In this article, we will explain what an insurance carrier is, how it works and how the term differs from an insurance provider.
Insurance carrier definition
An insurance carrier is a company that sells insurance. The term carrier is used interchangeably with insurance company, insurance agency, insurance provider and insurance brokerage. Insurance carriers sell policies, like home, auto and life insurance, directly to consumers. All of the biggest insurance companies that immediately come to mind, such as Geico or Allstate, are insurance carriers.
However, insurance carriers are different from insurance agents. An insurance agent is an employee of an insurance carrier, and sells policies on the carrier’s behalf. As a policyholder, you primarily work with an agent to manage your policy and file claims. But it’s the carrier that insures your assets, receives your monthly premium and ultimately, pays your claim after a loss.
Like all companies, you can find reviews on almost every insurance carrier in the country. Before you choose one, it’s important to do your own research to find a reputable provider. Look at customer reviews and financial strength ratings to see which carriers have the best scores. You can switch insurance carriers whenever you want to, but it’s better to find a company that meets your needs from the very beginning.
How an insurance carrier works
Today, most insurance carriers sell insurance online. You can visit their website, request an instant quote, customize your policy and make an initial payment all within the same day. The other option is to buy insurance through an agent who is employed by the carrier. Some insurance carriers also have local offices where agents take in-person appointments with prospective customers.
When you meet with an agent, they’ll help you decide how much coverage to get, if you need to purchase endorsements and if you qualify for any discounts. Using that information — as well as some personal details — the agent will calculate your final quote and prepare your policy documents. Once you sign the policy, your coverage will take effect as soon as you make the first payment, or on a specified date.
If you ever need to file an insurance claim, you’ll be paired with an underwriter who represents the insurance carrier and will determine how much money you’re owed based on the extent of the loss. The payout you receive comes directly from the insurance carrier, not the underwriter or the agent.
Insurance carrier vs. provider
If you’ve ever heard the term insurance provider, you may wonder if there is a difference between a provider versus a carrier. In reality, there’s no big secret here— the terms are synonymous. Both terms are used to describe a company that sells insurance policies for life, auto, home or other types of insurance products.
- An insurance carrier is a company that sells insurance directly to customers
- Allstate, Geico, and State Farm are all examples of popular insurance carriers
- Agents who sell policies are employees of insurance carriers
- Insurance carriers and providers are the same entity
If you’re in the market for insurance, you’re going to be purchasing a policy from an insurance carrier, which is simply a company that sells insurance. Depending on the provider you choose, you might be able to purchase a policy online. Otherwise, you’ll work directly with an agent that is employed by the carrier to find the right policy and customize your coverage.